IMF endorses New Zealand policy direction

The International Monetary Fund’s 2012 staff report on New Zealand confirms its support for the Government’s economic plan and particularly its focus on getting back to surplus and increasing national saving, Finance Minister Bill English says.

“The IMF endorses our approach to getting back to surplus and the rationale behind it,” he says.

“It notes that our deficit reduction path strikes a balance between the need to contain both public and private debt increases, while limiting any adverse impact on economic growth during the recovery.

“It also notes that getting back to fiscal surplus in 2014/15 should put New Zealand in a better position to deal with future shocks and take pressure off monetary policy and the exchange rate.”

In its staff report on New Zealand, issued today, the IMF shares the Government’s view that risks to the global economy could impact on New Zealand.

It also notes that New Zealand remains exposed through its high external liabilities.

“We are making progress and, compared to a lot of other countries, New Zealand is in reasonably good shape,” Mr English says.

“But it’s important that we remain focused on becoming more competitive and productive, and giving businesses the confidence to invest and grow, because that is how we will create more jobs and higher incomes.

“This cannot happen through fast-rising government spending and debt, as it has in the past.”

IMF report: http://www.imf.org/external/np/sec/pn/2012/pn1255.htm